I have no idea how I got on the email list of the Ayn Rand Center for Individual Rights but their press releases have been filling my spam box at a furious clip since last week's financial implosion. Disciples of the mid-20th Century philosopher/novelist who extolled the virtue of selfishness and who argued that the only truly free society is one that practices laissez-faire capitalism have been in a dither trying to explain away the failings of the kind of financial deregulation they support. Their conclusion is nothing if not consistent. According to a Sept. 19 press release from the Center's President Yaron Brook, “The unfree market has failed. It’s time for a truly free market.”
The Randians have focused their ire on the government for enacting policies to encourage expanding home ownership by those who didn't have the means to do so. This was certainly a contributing factor to the clusterfuck we are in now but what the Randians and other similarly-minded free-marketeers conveniently ignore is that “big government” doesn't just do what it does in a vacuum but responds to the desires of the most powerful forces in our society. Expanding home ownership was highly profitable for everyone from homebuilders to mortgage peddlers to the financial wizards who bundled these mortgages and resold them in the global marketplace. The aura of prosperity that came with the housing bubble was also key to getting President Bush re-elected in 2004.
A longer-range analysis suggests that the structural source of this crisis is the long-term (since 1973) decline of wages for U.S. Workers even as productivity (and corporate profits) has soared. Families looking to maintain a middle-class lifestyle (or in many cases, just to stay out of poverty), saw women and young people poured into the workforce in much greater numbers. When that was no longer enough, families went into debt or began tapping into their home equity like an ATM machine. Meanwhile, as the rich became ever richer, they poured their money into the markets and various speculative manias always in search of the highest possible return on investment. Under such conditions, it was inevitable that bankers would bring together the profit-seeking resources of the investing class and the home-owning aspirations of the struggling middle class to give birth to the great housing bubble. To the extent government presided over these nuptials and encouraged irresponsible behavior, its because that's what capital wanted.
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Note: Though it's easy to write off the Randians as being a marginal, fringe group or even a cult, as some have claimed, it's worth noting that one of Rand's close friends and disciples in the 1950s and 60s was none other than Alan Greenspan, a lifelong foe of government regulation who would go on to preside over the U.S. economy from 1987-2006 as Chairman of the Federal Reserve. In 2000, Congress handed Greenspan regulatory authority over Wall Street's giant financial services corporations. Unfortunately, very few people spoke out at the time.
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While some free-market ideologues are content to score theoretical points, others closer to the centers of power are looking to take advantage of the crisis to push their corporatist agenda. As Shock Doctrine author Naomi Klein recently wrote in the Guardian (UK), “Rest assured: the [free-market] ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize what is left of the public sector. We will also be told that our hopes for a green future are, sadly, too costly. For the rest of her article, click here.
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"Cash for Trash": Lastly, it's good to see that some people are keeping their sense of humor even as they fight back against the thieves who are trying to rob this country blind. One of the actions being organized for today's 4 p.m. rally at Wall Street is by folks with buymyshitpile.com who are encouraging people to cull the junk from their apartments and bring it to the financial district noting that “ since Wall Street is asking us to give them money for their worthless investments, some folks are planning to bring their OWN junk to Wall Street and see if they'll buy it. Bring your collectible mugs and limited edition Thomas Kinkade prints and add 'em to the pile!” God, I feel rich already. That 7-year-old i-book that died on me this summer whose “mark-to-market” value is zero may in fact be worth millions under Ben Bernanke's “hold-to-maturity” policy for buying up Wall Street financial products that could someday be worth whatever their owners say they are worth.